Last year was a "transformational" one for Activision as the publisher saw its sales and profits slip, but the board of directors wouldn't let the same fate befall CEO Bobby Kotick's bonus. In a filing with the Securities and Exchange Commission, the publisher today said that the board's compensation committee authorized a $7.85 million cash bonus for CEO Bobby Kotick for his performance in 2013, up from $2.5 million in 2012.

Kotick's base salary for 2013 was also increased to $2.1 million, up from $2 million the year prior. But those only paint a portion of the executive's overall haul for the year. For 2012, Kotick received almost $55.92 million in stock awards as part of a compensation package that totaled $64.9 million. They went on the publisher's books for 2012, they were to be doled out over a five-year span.

At the time, GMI Ratings corporate-governance consultant Nell Minow questioned Kotick's compensation, criticizing Activision's compensation committee for a lack of transparency into how those figures were determined. Activision's filing today specified that Kotick could have been awarded more under the guidelines of the company's 2008 incentive plan.

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Kotick, by his skills and hard work, took a bankrupt Activision and made it the world's largest game company.
Along the way he has employed the right people, but that is part of his skill.
99.99% of people would not have been as successful.

If you are envious of his remuneration why don't you just go out and earn the same? You seem to think that it requires no skill.

Regardless of your feelings about the dollar amount of his salary, his compensation is clearly not based on performance. A 12% YoY drop in net income for Activision translates into a 5% salary increase and a 300% bonus increase for Kotick? I don't see how that works out.

...there should be no limit to their pay. It is up to the shareholders to decide.

Well, you may think so, but CEOs don't. There's a reason they set up "compensation committees" packed with their pals rather than just send a note out with the annual report saying, "how much do you want to pay me?" and accept whatever answer they get back.

That's quite a serious suggestion, by the way. I think the market would be much more effective if CEOs contracted a year at a time to work for a company with only a certain minimum guaranteed pay (say, five or ten times what the lowest-paid employee makes), and then at the end of the year sent out a write-in ballot (no suggestions from the management!) with the annual report where the shareholders would say how much they thought he was worth that year. He'd get paid the average per-share value of that. At that point, he can decide whether he wants to sign up for another year and do the same again, or move on.

This seems to me as if it would produce a much more effective market for C-level executives (and directors) because the shareholders are now direct participants in the negotiation, rather than merely having very limited powers that are very costly to use (such as replacing the board of directors). They have a strong incentive to pay enough to keep good managers in place, but are far more resistant to strategies designed by the executives to collect more pay than they deserve.